The Timeliness of Financial Reporting and Fair Values: Evidence from U.S. Banks

Hua-Wei Huang (), Mai Dao and Wen-Chi Sun ()
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Hua-Wei Huang: Department of Accountancy and Graduate Institute of Finance & Banking, National Cheng Kung University, Taiwan, ROC
Mai Dao: College of Business and Innovation, The University of Toledo, 2801 W. Bancroft, Toledo, OH 43606, USA
Wen-Chi Sun: Department of Travel Industry Management, Far East University, Taiwan, ROC

Review of Pacific Basin Financial Markets and Policies (RPBFMP), 2017, vol. 20, issue 01, 1-30

Abstract: The public controversies over the implementation of Statement of Financial Accounting Standard No. 157 (SFAS 157) and its impact on the recent financial crisis motivate us to examine the association between fair values and reporting lags. With a sample of U.S. banking institutions, we find that less verifiable fair value information is associated with longer earnings announcement lag and audit report lag. Longer earnings announcement lags resulting from less verifiable fair value information are due to the additional time of managerial estimations. Less verifiable fair values may also result in longer audit report lags due to the added training for auditors. Our study extends the current literature on fair values and reporting lags. Our findings contribute to the contemporary research on the timeliness of financial information disclosures which promotes the efficient functioning of the economy. Moreover, the findings of our study may be of interest to the global regulators, investors and other financial statement users.

Keywords: SFAS 157; fair value; earnings announcement lag; audit report lag (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (2)

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DOI: 10.1142/S0219091517500060

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